Startups in Southeast Asia have been taking full advantage of the region’s fast-growing economy in the last few years. Venture capital (VC) firms have been the driving force in this blossoming startup landscape. But all this changed when the pandemic—the black swan of 2020—hit. While the effects of this widespread threat may vary depending on the industry, every company needs to reexamine its business models and consider pivoting, to survive or hopefully, thrive. 

Changing business models in response to COVID-19

The research centre, MoEngage, analysed over 1.5 billion mobile app users from 12 industries worldwide, to create the COVID-19 Impact Quadrant which divides industry verticals in specific geographies into four major categories: explosion, slowdown, growth and emergence. 

Already having the advantage of operating online, eCommerce startups are booming during this lockdown, with some pivots along the way. The education industry is seeing the potential too, with learners of all ages rediscovering edtech apps and eLearning platforms, while video conferencing software is becoming more popular than ever as a teaching resource.

Since lockdown began, many people have had more time to enjoy the benefits of streaming services and online gaming or fitness apps. Downloads of food delivery apps also spiked with a 21% increase as citizens remained housebound. 

Let’s take a closer look to see how some startups have changed their business model in response to this rapidly evolving marketplace. 

Ride-hailing 

Started in 2012, Grab claims to be Southeast Asia’s largest mobile technology company and connects millions of consumers to millions of drivers, merchants, and businesses. As ride-hailing is their primary business and with pandemic movement restrictions in place, they had to switch their focus quickly. 

Grab quickly re-assigned their drivers to work in the delivery sections of their company and sped up the process for merchants to get on board. 

Similarly, the Indonesian Unicorn, GoJek, had to pivot from its popular GoRide motorcycle taxi service to a more delivery orientated model. This was partly due to social distancing measures that led to a drop of 14% usage in one week in March.

Online shopping

Thousands of Tokopedia merchants who listed face masks and hand sanitisers at extortionate prices have been blocked from the platform to prevent price-gouging. Finding in-demand products priced at as much as five times the normal price by unscrupulous merchants, Tokopedia quickly shut them down. It also banned merchants from selling COVID-19-related products using unproven claims. 

Besides protecting customers from opportunists, it also eliminated service fees and reduced shipping costs for healthcare products to help distribute these essential products faster.

Similarly, Bukalapak implemented the same UGC (User-Generated Content) approach and, in addition, they are working with their suppliers to be able to deliver more masks

Blibli is one of the most popular online shopping malls in Indonesia. It is a convenient way to order pretty much anything to your door with free shipping. To safeguard clients and employees, they are following the WHO guidelines and provided its Blibli Express Service (BES) couriers with gloves and masks and instructions to limit direct contact with the customer and logistics partners. They have also stepped up their SME initiatives to help local merchants get online. 

Food delivery services

To respect the social distancing rules, most food delivery companies have introduced a “no contact” service, with many delivery drivers alerting customers and leaving the delivery at the door.

man riding bicycle

Popular food delivery apps GrabFood and GoFood have implemented the contactless delivery options, as have Foodpanda. While checking your order out on the app, you have the option to choose the contactless delivery option. These companies are also requesting app-based payments rather than using cash. 

Healthtech

Fitness apps like Strava and HealthifyMe have launched extra challenges for home workouts and further gamified their apps by making all user scores visible and giving grades according to performance. You can get kudos for your crunches or even add an extreme gardening session, a really strenuous house cleaning session or participate in a video conference planking competition. 

person wearing space black Apple Watch with black strap

Strava encourages people to stay motivated during this lockdown, and their blogs have become pandemic focussed. Meanwhile, HealthifyMe has added a “Fight Corona” section to their site to help keep users safe and healthy during this time. 

It is clear that if eCommerce startups want to survive this pandemic, they need to revisit their strategies. The customer’s pain point is crucial to understanding how to do this successfully. Many startups have already addressed this by focusing on relieving problems such as the delivery of sanitisers or food, or providing quality leisure time with eCommerce or adapted sports and health applications. Undoubtedly, we will notice that it is the most adaptive and responsive startups in Southeast Asia that will survive COVID-19. 

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